EXHIBIT 4.4
FORM OF CO-CONVERSION AGENT WARRANT EXCERCISABLE AT $3.1847 PER SHARE
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER FOR
INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF 1933 AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER.
FORTUNE PETROLEUM CORPORATION
WARRANT _______WARRANTS
CERTIFICATE NO. ____ DATED DECEMBER__, 1996
(THE "EXERCISE DATE")
WARRANT TO PURCHASE SHARES OF COMMON STOCK
THIS CERTIFIES that, for value received,_____________________________ or
registered assigns ("Holder"), is the registered holder of the number of
warrants set forth above (the "Warrants"), each of which entitles Holder to
purchase, subject to the terms and conditions set forth below, one fully paid
and non-assessable share of Common Stock of FORTUNE PETROLEUM CORPORATION, a
Delaware corporation (the "Company"), at a purchase price of $3.1847 per share
(the "Purchase Price"), at any time or from time to time after the date set
forth above (the "Exercise Date") and on or prior to 5:00 P.M., Houston, Texas
time, on December __, 1999 (three years after the Exercise Date) (the
"Expiration Date"). The Purchase Price and the number and kinds of securities of
the Company purchasable upon the exercise of the Warrants represented hereby are
subject to modification or adjustment as provided below. The Purchase Price
shall be payable in lawful funds of the United States. Upon presentation and
surrender of this Warrant Certificate together with the payment of the Purchase
Price attached hereto duly executed, at the place and in the manner specified in
Section 4, below, the Holder shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased.
1. REGISTRATION AND TRANSFER
1.1 GENERAL
The Company shall maintain books for the registration and transfer of the
Warrants. Prior to due presentment for registration of transfer of the Warrants,
the Company may deem and treat the registered Holder as the absolute owner
thereof.
1.2 TRANSFER
The Warrants may not be assigned, or transferred without
the prior written consent of the Company, in its sole
and absolute discretion;
1.3 REGISTRATION
Subject to Section 1.2 above, the Company shall register
upon its books any transfer of the Warrants upon
surrender of this Warrant Certificate to the Company
accompanied (if so required by the Company) by a written
instrument of transfer duly executed by the registered
Holder or by a duly authorized attorney. Upon any such
registration of transfer, a new Warrant Certificate
shall be issued to the transferee and the surrendered
Warrant Certificate shall be canceled by the Company. If
only a portion of the Warrants represented by this
Warrant Certificate are transferred, a new Warrant
Certificate shall also be issued to the transferor.
2. LOSS OR MUTILATION
2.1 Upon receipt by the Company of reasonable evidence of
the ownership and the loss, theft, destruction or
mutilation of this Warrant Certificate, and, in the case
of loss, theft or destruction, of indemnity reasonable
satisfactory to the Company, or, in the case of
mutilation, upon surrender and cancellation
EXHIBIT 4.4 PAGE 1
of the mutilated Warrant Certificate, the Company shall
execute and deliver in lieu thereof a new Warrant
Certificate representing an equal number of Warrants.
3. ADJUSTMENTS
The Purchase Price and the number of shares purchasable upon the
exercise of the Warrants shall be subject to adjustment from time
to time upon the occurrence of certain events described herein.
3.1 PURCHASE PRICE ADJUSTMENT
(a) SPLIT, SUBDIVISION OR COMBINATION OF SHARES
If the Company, at any time while these Warrants remain
outstanding and unexpired, shall split, subdivide or
combine the securities as to which purchase rights
hereunder exist, the Purchase Price shall be
proportionately increased or decreased as appropriate.
(b) COMMON STOCK DIVIDENDS
If the Company, at any time while these Warrants remain
outstanding and unexpired, shall pay a dividend or make
any other distribution with respect to the shares of
Common Stock payable in Common Stock, then the Purchase
Price shall be adjusted, from and after the date of
determination of the shareholders entitled to receive
any dividend or distribution, to that price determined
by multiplying the Purchase Price in effect immediately
prior to such date of determination by a fraction, the
numerator of which shall be the total number of shares
of Common Stock outstanding immediately prior to such
dividend or distribution, and the denominator of which
shall be the total number of shares of Common Stock
outstanding immediately after such dividend or
distribution.
(c) OTHER DIVIDENDS
If the Company, at any time while these Warrants remain
outstanding and unexpired, shall pay a dividend or make
any other distribution with respect to Common Stock
payable in stock (other than Common Stock) or other
securities or property, the Holder hereof shall be
entitled to receive, upon exercise of the Warrants, in
addition to the shares of Common Stock otherwise
receivable upon exercise hereof, the same number and
kind of stock, other securities or property which the
Holder would have received had the Holder then held the
shares of Common Stock receivable on exercise hereof on
and before the record date for such dividend or
distribution.
(d) RECLASSIFICATION AND RECAPITALIZATION
In the event of any reclassification or recapitalization
of the Common Stock, the Purchase Price shall be
appropriately adjusted in good faith by the Board of
Directors of the Company to reflect such
reclassification or recapitalization and to protect:
(i) the rights of the Holder to receive, upon the
exercise hereof, the same amount of securities or
property that it would have received had it
exercised the Warrants immediately prior to the
date for determination of Holders of Common Stock
entitled to receive securities or property as a
result of such reclassification or
recapitalization, and;
(ii) the Holder's rights to appropriate adjustment upon
further stock dividend, stock split,
reclassification or recapitalization.
3.2 ADJUSTMENT OF NUMBER OF SHARES
Upon each adjustment in the Purchase Price to Section 3.1(a)
or Section 3.1(b) above, the number of shares of Common Stock
purchasable hereunder shall be adjusted to the nearest whole
share to the product obtained by multiplying the number of
shares purchasable immediately prior to such adjustment in the
Purchase Price by a fraction, the numerator of which shall be
the Purchase Price
EXHIBIT 4.4 PAGE 2
immediately prior to such adjustment, and the denominator of
which shall be the Purchase Price immediately after such
adjustment.
3.3 CAPITAL REORGANIZATION, MERGER OR SALE OF ASSETS
If, at any time, or from time to time, there shall be a
capital reorganization of the Common Stock (other than a
subdivision, combination, reclassification, or exchange of
shares provided for elsewhere herein), or a merger or
consolidation of the Company with or into another corporation,
or a sale of all, or substantially all, of the Company's
properties and assets to any other person, the Holder shall
thereafter be entitled to purchase (and it shall be a
condition to the consummation of any such reorganization,
merger, consolidation or sale, that appropriate provision be
made so that the Holder shall thereafter be entitled to
purchase), upon exercise of the Warrants, the kind and amount
of shares of stock or other securities or property in the
Company, or of the successor corporation resulting from such
merger, consolidation or sale, to which a holder of Common
Stock issuable upon exercise would have been entitled on such
capital reorganization, merger, consolidation or sale to the
end that the provisions of this Section 3 (including
adjustment of the Purchase Price then in effect and the number
of shares of Common Stock purchasable upon exercise of the
Warrants) shall be applicable after that event in as nearly
equivalent a manner as may be practicable.
3.4 CERTIFICATE AS TO ADJUSTMENT
Upon the occurrence of each adjustment or readjustment of the
Purchase Price and the number of shares of Common Stock
pursuant to this Section 3, the Company, at its expense, shall
promptly compute such adjustment or readjustment in accordance
with the terms hereof, and cause its chief financial officer
to verify such computation and prepare and furnish, to the
Holder, a certificate setting forth such adjustment or
readjustment and showing, in detail, the facts upon which such
adjustment or readjustment is based. The Company shall, upon
the written request at any time of the Holder, furnish, or
cause to be furnished to the Holder, a like certificate
setting forth :
(a) such adjustment and readjustment;
(b) the Purchase Price at the time in effect, and
(c) the number of shares of Common Stock and the
amount, if any, of other securities and/or
property which, at the time, would be receivable
upon the exercise of the Warrants.;
Such certificate shall set forth, in reasonable detail, such
facts as may be necessary to show the reason for, and manner
of, computing such adjustment.
3.5 NO IMPAIRMENT
The Company will not, by amendment of its Certificate of
Incorporation, or through any reorganization,
recapitalization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of
securities, or any other voluntary action, avoid , or seek to
avoid, the observance or performance or any of the terms to be
observed or performed hereunder by the Company, but will at
all times in good faith assist in the carrying out of all the
provisions of this Section 3, and in the taking of all such
actions as may be necessary or appropriate in order to protect
the exercise rights of the Holder against impairment.
3.6 NOTICES OF RECORD DATE
In the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive
any dividend (other than a cash dividend) or other
distribution, any rights to subscribe for, purchase, or
otherwise acquire any shares of stock of any class or for any
securities or property, or to receive any other right, the
Company shall mail to the Holder, at least thirty (30) days
prior to the date specified therein, a notice specifying the
date on which any such record is to be taken for the purpose
of such dividend, distribution, or right, in the amount and
character of such dividend, distribution or right.
EXHIBIT 4.4 PAGE 3
3.7 NO FRACTIONAL SHARES
No fractional shares shall be issued upon exercise of the
Warrants, and the number of shares of Common Stock to be
issued shall be rounded to the nearest full share. Such
rounding shall be determined on the basis of the total number
of Warrants the Holder is at the time exercising, and the
number of shares of Common Stock issuable upon such aggregate
exercise.
4. EXERCISE OF WARRANTS
The purchase rights represented by these Warrants are
exercisable by the Holder, in whole or in part, at any time
and from time to time, on or after the Exercise Date, and on
or prior to the Expiration Date. The Warrants may be exercised
by surrender of this Warrant Certificate, with the Notice of
Exercise attached hereto duly executed, to the principal
executive office of the Company, presently located at 515 W.
Greens Rd., Suite 720, Houston, Texas, 77067 (or such other
office or agency of the Company as it may designate by notice
in writing to the registered Holder hereof at the address of
such Holder appearing on the books of the Company), and shall
be accompanied by payment in cash, check or bank draft,
payable to the Company, in an amount equal to the full
purchase price for the shares of Common Stock of the Company
(hereinafter referred to as the "Shares"). The Company shall
deliver a certificate or certificates representing the Shares
as soon as practical, and, in any event, within ten (10) days
after the notice shall be received. The certificate or
certificates for the Shares shall be registered in the name of
the person or persons exercising the Warrants and shall be
delivered, as provided above, to the written order of the
person or persons exercising the Warrants. All shares of
Common Stock which may be issued upon the exercise of the
Warrants, as provided herein, shall be fully paid and
non-assessable and free from all taxes, liens and charges with
respect thereto. Holder shall not be entitled to the
privileges of share ownership as to any shares of Common Stock
not actually issued and delivered to it. Holder hereby
certifies that all shares of Common Stock in the Company
purchased or to be purchased by it, pursuant to the exercise
of the Warrants, are being, or are to be, acquired by it for
investment and not with a view to the distribution thereof.
5. REDEMPTION
(a) The then outstanding Warrants may be redeemed, at the
option of the Company, at $.05 per share of Common
Stock, purchasable upon exercise of such Warrants, at
any time after the Warrants shall be separately
transferable in accordance with this agreement, and
after the Daily Market Price per share of the Common
Stock, for a period of at least 10 consecutive trading
days ending not more than 10 days prior to the date of
the notice given, pursuant to Section 5(b), has equaled
or exceeded $6.00 per share, and prior to expiration of
the Warrants. The Daily Market Price of the Common Stock
shall be determined by the Company in the manner set
forth in Section 5(e) as of the end of each trading day
(or, if no trading in the Common Stock occurred on such
day, as of the end of the immediately preceding trading
day in which trading occurred). All outstanding Warrants
must be redeemed if any are redeemed, and any right to
exercise an outstanding Warrant shall terminate at 5:00
p.m. (Houston, Texas time) on the business day
immediately preceding the date fixed for redemption. A
trading day shall mean a day in which trading of
securities occurred on the American Stock Exchange.
(b) The Company may exercise its right to redeem the
Warrants only by giving the notice set forth in the
following sentence by the end of the tenth day after the
provisions of Section 5(a) have been satisfied. In case
the Company shall exercise its right to redeem, it shall
give notice to the registered holders of the outstanding
Warrants, by mailing to such registered holders, a
notice of redemption, first class, postage prepaid, at
their addresses as they shall appear on the records of
the Company. Any notice mailed in the manner provided
herein shall be conclusively presumed to have been duly
given, whether or not the registered holder actually
receives such notice.
(c) The notice of redemption shall specify the redemption
price, the date fixed for redemption (which shall be the
thirtieth day after such notice is mailed), the place
where the Warrant certificates shall be delivered and
the redemption price shall be paid, and that the right
to exercise the Warrant shall terminate at 5:00 p.m.
(Houston, Texas time) on the business day immediately
preceding the date fixed for redemption.
EXHIBIT 4.4 PAGE 4
(d) Appropriate adjustment shall be made to the redemption
price and to the minimum Daily Market Price prerequisite
to redemption set forth in Section 5(a) hereof, in each
case on the same basis as provided in Section 3 hereof,
with respect to adjustment of the Warrant Price.
(e) For purposes of this Agreement, the term "Daily Market
Price" shall mean:
(i) if the Common Stock is traded in the
over-the-counter market and not on the American
Stock Exchange ("AMEX"), or on any national
securities exchange, the closing bid price of the
Common Stock on the trading day in question, as
reported by AMEX or an equivalent generally
accepted reported service; or
(ii) if the Common Stock is traded on the AMEX or on a
national securities exchange, the daily per share
closing price of the Common Stock on the AMEX, or
on the principal stock exchange on which it is
listed on the trading day in question, as the case
may be.
For purposes of clause (i) above, if trading in the Common
Stock is not reported by the AMEX, the bid price referred to
in said clause shall be the lowest bid price as reported in
the "pink sheets" published by National Quotation Bureau,
Incorporated. The closing price referred to in clause (ii)
above shall be the last reported sale price, or, in case no
such reported sale takes place on such day, the average of the
reported closing bid and asked prices, in either case on the
AMEX or on the national securities exchange on which the
Common Stock is then listed.
6. GENERAL
The Company shall, at all times during the term of the
Warrants, reserve and keep available, out of its authorized but
unissued shares of Common Stock, such number of Common Stock as
will be sufficient to satisfy the requirements of this Warrant
Certificate; and, if at any time, the number of authorized but
unissued shares of Common Stock shall be insufficient to effect
the exercise of the Warrants, in addition to such other remedies
as shall be available to the Holder, the Company shall take such
corporate action as may, in the opinion of the Company, be
necessary to increase its authorized but unissued shares of
Common Stock to such number as shall be sufficient for such
purposes. The Company shall pay all original issue and transfer
taxes with respect to the issue and transfer of shares of Common
Stock pursuant hereto and all other fees and expenses necessarily
incurred by the Company in connection therewith, and will, from
time to time, use its best efforts to comply with all laws and
regulations which, in the opinion of the Company, shall be
applicable thereto.
7. LEGENDS
It is understood that the certificates evidencing the Shares may
bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933; THEY HAVE BEEN
ACQUIRED BY THE HOLDER FOR INVESTMENT AND MAY NOT BE PLEDGED,
HYPOTHECATED, SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT
AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT OF 1933 AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER".
8. NOTICES
Any notice required by the provisions of this Warrant
Certificate to be given to the Holder shall be deemed given three
(3) days after it is deposited in the U.S. Mail, first-class
postage prepaid, addressed to the Holder at its address appearing
on the books of the Company, or on the date actually delivered in
person.
EXHIBIT 4.4 PAGE 5
9. GOVERNING LAW
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the state of Texas.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed as of the date first above written.
FORTUNE PETROLEUM CORPORATION
By: TYRONE J. FAIRBANKS
President and Chief Executive Officer
EXHIBIT 4.4 PAGE 6
NOTICE OF EXERCISE
TO: FORTUNE PETROLEUM CORPORATION:
The undersigned hereby:
(1) elects to exercise_______________ Warrants represented by the
attached Warrant Certificate No.____________ , and to
purchase______________ shares of Common Stock of Fortune
Petroleum Corporation issuable upon the exercise of said
Warrants, and
(2) tenders herewith payment of the Purchase Price of such shares
in full, and requests that certificates representing such
shares be issued in the name of and delivered to the following
[ please print]:
_________________________________________________
Social Security or Other Identifying Number
_________________________________________________
Name
_________________________________________________
Street Address or Post Office Box
_________________________________________________
City, State and Zip Code
_______________________
Date: _____________________________________
Print Name of Holder
_____________________________________
Signature
_____________________________________
Title
EXHIBIT 4.4 PAGE 7